Term
How is a consumer's maximization point illustrated as?
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Definition
A tangency between the budget line and the indifference curve
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Term
When is price elasticity of supply greater, the long run, or the short run?
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Definition
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Term
What is a Production Schedule?
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Definition
Labor input and the related output of physical product
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Term
How do you calculate a firm's Marginal Physical Product of Labor?
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Definition
Change in Quantity of Physical Product Divided by the Units of Labor
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Term
Where do you get the data needed to calculate a firm's Marginal Physical Product of Labor?
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Definition
A Production Schedule
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Term
What is Marginal Physical Product of Labor Defined as?
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Definition
The change in total output that results from a change in labor input.
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Term
Marginal Physical Product efficiently does what as more labor units are added?
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Definition
It eventually peaks to the highest it can be, before continually shrinking.
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Term
What is the labor quantity with the highest total physical output?
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Definition
Maximum Quantity of Labor
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Term
What is the Slope of a production function?
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Definition
Marginal Physical Product
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Term
What is the slope a tangent line on a production function that represents the Maximum Quantity of Labor?
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Definition
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Term
When Marginal Physical Product Equals Zero, what is the unit of labor aka input?
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Definition
The Maximum Quantity of Labor
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Term
What is the definition of Fixed Costs?
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Definition
Costs that do not vary with the level of output of the firm.
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Term
What is the Definition of Total Variable Costs?
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Definition
Costs that vary with the level of output of the firm.
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Term
How does one calculate total costs?
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Definition
Fixed Costs Plus Total Variable Costs
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Term
How does one Calculate Total Variable Costs when provided with Total Cost and Total Fixed Costs?
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Definition
The Difference of Total Costs and Total Fixed Costs
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Term
On a graph how are Total Costs and Total Variable Costs represented?
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Definition
As parallel curves
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Term
On a graph how are Total Fixed Costs represented?
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Definition
As a horizontal line that divides Total Costs and Total Variable Costs curves.
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Term
How does one calculate Average Fixed Cost?
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Definition
Total Fixed Costs Divided by Quantity Produced
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Term
How are Average Fixed Costs represented on a graph?
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Definition
A negative sloping curve
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Term
What is the Definition of Average Fixed Costs?
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Definition
Fixed Costs Per Unit of Output
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Term
How does one Calculate Average Variable Cost?
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Definition
Total Variable Costs Divided by Quantity
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Term
How are Average Variable Costs represented on a graph?
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Definition
As a "U" shape that's vertex is at the Maximum Quantity of Labor.
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The left half represents increasing marginal returns.
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The right half represents diminishing marginal returns.
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Term
How does one calculate Average Total Costs when provided with the Total Cost and Quantity?
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Definition
Total Costs Divided by Quantity
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Term
How does one calculate Average Total Costs when provided with Average Variable Cost and Average Fixed Costs?
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Definition
Average Variable Costs plus Average Fixed Costs
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Term
How does one calculate Average Fixed Costs, when provided with Average Total Cost and Average Variable Costs?
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Definition
Average Total Costs Minus Average Variable Costs
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Term
How are Average Total Costs, Average Variable Costs, and Average Fixed Costs represented on a graph?
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Definition
Average Total Costs and Average Variable Costs are positively sloping curves, while Average Fixed Costs is a negative sloping curve.
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Term
How does one calculate Marginal Cost when provided with Change in Total Costs and Change in Quantity?
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Definition
Change in Total Costs Divided by Change in Quantity
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Term
How does one calculate, in a short run, Marginal Cost when provided with Change in Total Costs and Change in Quantity?
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Definition
Change in Total Variable Costs Divided by Change in Quantity
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Term
Do Total Fixed Costs Vary or are they constant?
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Definition
They are constant
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Term
How is Marginal Costs represented on a graph?
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Definition
It is a positive curve, "J" shaped, that curves upward through the Average Total Cost and Average Variable Cost curves, through their minimum points.
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Term
What do you do if a Total Cost Function is given in this form?
TC=A+BQ+(CQ^2)
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Where "Q" is the output
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Definition
Total Fixed Costs Equals "A"
Because "A" does not vary
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Total Variable Costs Equals
BQ+(CQ^2)
Because these terms vary
---------------------------
Average Fixed Costs Equal A/Q
Because AFC=TFC/Q, TFC=A
--------------------------------
Average Variable Costs Equals
B+CQ
Because AVC= TVC/Q
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Average Total Costs Equals
AFC+AVC
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